Screening inherited tenants?

Question

I close on 14 properties in less than 2 weeks just outside of Springfield, MO. Most of them have month to month tenants in them currently. Is it appropriate to screen them after I take possession since their contracts expire every month?

Richard F. · Answer

Aloha,

I would normally meet with each tenant to inspect their unit very shortly after closing. At that time I inform them their current agreement will NOT be renewed when the current term is up. They are welcome to submit a complete application if they wish to remain and sign a new agreement with our terms, which may, or may not, be different from current terms, depending on our findings of condition, current market conditions, and their credit worthiness.

Be sure you are getting the security deposits transferred to you at closing, and confirmation of rents/deposit with estoppel. If they have not already been advised of a change in address/account for rent payments and maintenance requests, that should be provided to each tenant at that initial meeting also, although my preference is for the prior owner or PM to send a simple letter of introduction to the tenants to ensure a smooth transition as a first step.

Jon Kelly · Answer

@Christian Jones these are your tenants so you have every right to know their information. Just because you screen them doesn't mean you need to take any action. If any are below your standards I would likely wait to see if they miss one rent payment before taking any action

Luke Stewart · Answer

It is really up to you, I think if you want to screen each one and you give them notice of the ownership change that's 1000% valid. You didn't give them the initial lease and you may run your properties different than the last owner.

Chase Mills · Answer

I 100% agree with Richard here and would consider doing what he is saying. Do not rely on the current owner/PM company to do anything on your behalf. Also, in Missouri if they are month to month, you have to give 30 days notice prior to the new term starting. Therefore, if the month to month starts on the first, you want to give them 30 days prior to the first of the month or else you will have to wait until after the following month for any changes to take place. Congratulations on your purchase and welcome to REI in Southwest Missouri! I will send you a connection request and hopefully one day our paths will cross in the REI world.

Richard F. · Answer

Be sure you DO get an estoppel signed by the tenants confirming that. Otherwise, if at a later time they produce a "receipt" for security deposit, you will be on the hook for it...

Nathan Gesner · Answer

You have to honor the existing lease. If they have six months left, it wouldn't do any good to screen them because you can't just kick them out based on screening findings. If they are month-to-month, then you can give them a 30-day notice that you want them to apply, pass screening, and sign a new lease.

Eliott Elias · Answer

You are stuck with whatever tenants are in place

Nate Sanow · Answer

Short answer to me is yes. I can’t think of any reason for it to be “inappropriate “.

Screening inherited tenants?

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